This article was published exclusively on Tencent News

Introduction

On October 14, 2025, DJI, the world¡¯s leading company in the field of civil drone technology, filed an appeal to the U.S. Federal Court of Appeal at the District District District of Columbia on the case of its inclusion in the U.S. Department of Defense¡¯s (DoD) ¡°Chinese Military Industrial Enterprises¡± (CMC) list.

DJI appealed against the Ministry of National Defense. (Source: DJI official website)

The move marks a further escalation of the legal game between the company and the U.S. government. The appeal aims to overturn a September 2025 decision issued by the U.S. District Court for the District of Colombia. In the judgment, although the District Court found that the Ministry of Defense's core allegations against DJI lacked substantive evidence, it ultimately upheld its decision to keep them on the CMC list on relatively arbitrary grounds.

The core legal conflict in this case lies in the contradiction between the broad discretion of the U.S. executive branch in terms of national security and the objectivity requirements of the U.S. Administrative Procedure Act for administrative decision-making.DJI's appeal is not only a legal struggle for its own reputation and commercial interests, but also a key case to test the legality boundaries of the U.S. government's administrative actions in the process of implementing its "technological decoupling" strategy from China.

This paper will analyze the legal basis, judicial precedent, geopolitical dynamics and economic implications of the case, and aims to reveal how the case becomes an important prism for observing China-US technological competition, global industrial chain restructuring and adjustment of the international economic order.

Legal Battlefields: Confrontation between Administrative Procedures and National Security Authority

The basis of DJI's appeal will focus on the boundary between the legitimacy of administrative law procedures and the discretion of national security. Although the U.S. judicial system generally follows the principle of judicial modesty in cases involving national security, the logic shown by the district court in its judgment that is inconsistent with key precedents provides a challenging but not imfeasible legal path for DJI's appeal.

(A) Potential conflict between Section 1260H of the Defence Authorization Act and the Administrative Procedure Act

The U.S. Department of Defense has direct legal authorization to include Daiichi on the CMC list. Derived from Section 1260H of the National Defense Authorization Act for Fiscal Year 2021 (NDAA)The article authorizes the Minister of Defense to identify and publish a list of entities that operate directly or indirectly in the United States and are identified as ¡°Chinese military-industrial enterprises.¡±

DJI is included in the CMC list. (Image credit: thenewcamera.com)

The bill's definition of "China military enterprise" covers two categories: One is an entity directly or indirectly owned, controlled or represented by the People's Liberation Army of China or an organization affiliated to the Central Military Commission; the other is an entity identified as a "contributor to military-civilian integration to the foundation of China's defense industry." The definitions of key terms such as "contributor" and "association" in this clause are relatively vague, which gives the Department of Defense great discretion in the identification process.

In contrast, the core weapon of DJI's legal challenge is the US Administrative Procedure Act (APA). Under APA Section 706 (2) (A), the court has the authority to "find and vacate ¡­ any agency act, finding, and conclusion that is arbitrary, arbitrary, abusive of discretion, or inconsistent with the law".

This "arbitrary and capricious" standard of review requires that the agency's actions must be based on consideration of relevant factors and establish a rational connection between existing facts and final decisions. DJI argued that the Ministry of Defense's designation in the absence of evidence of substantive cooperation between it and the China military constituted an arbitrary administrative action and violated APA regulations.

The controversial focus of the case is the logic of the district court¡¯s ruling. On the one hand, the court admitted that the Ministry of National Defense failed to prove its core allegation, that is, DJI is directly related to the Chinese military; However, on the other hand, that decision to list was maintain on two grounds fixed¡£ The first, DJI has obtained the qualification of "National Enterprise Technology Center" recognized by the National Development and Reform Commission of China; the second, DJI's drone technology has inherent dual-use attributes. This judgment logic provides a key breakthrough for DJI's appeal, because it forms a significant conflict with the judicial standards of previous similar cases.

This difference in legal interpretation, It reflects how the administration uses the vague language in the mandatory bills to pursue its policy goals, while the judicial system is required to balance between respecting administrative discretion andining the criteria for rational decision-making laid down by the APA.¡±¡£The outcome of the appeal will largely determine the degree of judicial constraints the U.S. National Security Department will be subjected to when it will take restrictive measures against Chinese companies in the future.

(2) Enlightenment from precedents: differences between Xiaomi and Huawei cases

From a precedent perspective, the victory of the Xiaomi case in 2021 and the subsequent defeat of the Huawei case together draw out a legal path full of variations. the Xiaomi case established key criteria for judgment: the court explicitly refused to use enterprise technology with two-use attributes as a full basis for listing, and found that the decision of the Ministry of Defense constituted "arbitrary and repetitive inconsistency" due to the lack of "substantial evidence".

However, Huawei¡¯s experience in a series of lawsuits has revealed the strong resistance of the ¡°judicial defence¡± principle: once the government acts on the grounds of national security, the courts are not willing to easily challenge their judgment in the professional field, but respect the decisions of the administrative branch. Though the humiliation standards established in the Chevron case in 2024 have been overthrown, it mainly involves domestic decentralization and does not affect the usual practice of ¡°one voice to the outside¡± in foreign affairs.

These two completely different precedents indicate that DJI's most effective strategy may be to focus on attacking procedural flaws and insufficient evidence in the decision-making process of the Ministry of National Defense, rather than challenging its discretion in the field of national security head-on. Therefore, a more realistic litigation goal may not be to completely overturn the designation, but to strive to remand the case for retrial (remand), thus gaining valuable time and strategic space.Extended reading DJI's "death" against the U.S. Department of Defense, what are the chances of winning the Court of Appeal?¡¹

The Legislation: Geopolitical and Economic Causes

The decision to include Djibouti in the CMC list, which is deeply driven by far beyond the scope of legal texts,In essence, it is a strategic suppression measure adopted by the United States to achieve its own goals in the global technological and economic competition. Legal ProceduresAmong them, it plays more important role in achieving policy goals Tool Role¡£

Strategic restriction of the global drone market

The U.S. Department of Defense¡¯s actions are rooted in strategic considerations about the absolute superiority of Daiichi in the global civilian drone market and related core technologies.

In this fast-growing strategic emerging industry, Jiangxi has established industry standards and core technological advantages. This technological leadership not only ensures its dominant position in the consumer market, but also integrates its influence deeply into many key professional areas such as agriculture, energy and public safety, which is the fundamental reason why it has become a strategic target for the United States.

The inclusion of Jiangxi on the CMC list is fully in line with the macro-policy framework of "strategic competition" and "technology disconnection" implemented by the United States in recent years. Its fundamental purpose is to curb China's rise in the field of high-tech by limiting a Chinese "national champion" enterprise that occupies key nodes in the global industrial chain.

This approach is not only intended to slow down the speed of China's technological progress, but also to create market space and development opportunities for domestic UAV companies in the United States, such as Skydio. By labeling market leaders as "national security threats," the U.S. government is essentially pursuing a non-tariff trade barrier, an industrial policy in the name of national security that aims to reshape the market competition pattern through administrative means and support domestic industries.

Compared to traditional tariff barriers, this restriction, based on a national security list, is more accurate and effective, not only directly affecting sales, but also triggering investment bans and serious reputational damage, thereby achieving a deeper level of deterrent effect.

(2) Economic impact on the United States

However, restrictive measures against Djibouti are a double-edged sword, and its negative impact on the U.S. domestic economy and specific industries cannot be ignored.

In fact, many key industries in the United States have become highly dependent on DJI's cost-effective drones. From precision operations in the agricultural field, to infrastructure inspections in the construction and energy industries, to standard aerial photography in film and television production, its products have become indispensable productivity tools. Especially in the field of public safety, fire protection, police and other departments generally rely on DJI drones to perform high-risk tasks such as fire reconnaissance and search and rescue, which has significantly improved operational efficiency and safety levels.

Implementing a comprehensive ban on sales in the country would directly lead to a significant increase in the operating costs of these industries.Alternative products on the market are not only more expensive, but often cannot match DJI in terms of performance, stability and ecosystem maturity. This will force thousands of U.S. small and medium-sized businesses, farmers and public service agencies to face difficult choices: either bear higher operating costs, accept performance-reducing alternatives, or may even be forced to abandon drone applications.

Seeing more broadly, DJI's business ecosystem in the United States supports huge economic activity and jobs.According to industry estimates, its economic activity in the United States is worth more than $116 billion and supports more than 450,000 jobs, covering sales, maintenance, software development and application training. A blanket ban would be devastating to this vast ecosystem.

DJI drones are widely used in U.S. agriculture. (Photo source: DJI official website)

In addition to, Dongguan's supply chain is also deeply tied to U.S. chip companies such as Qualcomm and Intel.The sanctions would also have an indirect negative impact on these upstream U.S. suppliers, which reveals an inherent contradiction in U.S. technology-restriction policies: while trying to secure long-term technological advantage by fighting competitors, it could cause direct and significant damage to its own economy¡¯s productivity and innovative vitality.

Macro-perspective: Towards a divided global technological order

The impact of the U.S. science and technology policy toward China reflected in the DJI case has gone beyond the bilateral scope and is profoundly reshaping the global technology governance pattern and the international economic order. The United States' approach to "securing" commercial competition is accelerating the global technology market from integration to fragmentation, and has triggered different coping strategies in various countries.

Defining civilian drone technology as a national security threat and using the broad concept of "military-civilian integration" as the basis for sanctions is essentially instrumentalizing international economic rules to serve its geopolitical goals. This unilateralism is contrary to the principles of non-discrimination and fair trade advocated by the World Trade Organization (WTO) and has brought huge uncertainty to global multinational technology companies.

Faced with the policy pressure of the United States, its allies and other major economies did not form a United front, but adopted diversified response strategies based on their own interests, which further exacerbated the division of the global technological order. Although the European Union and Japan cooperate with U.S. sanctions in the semiconductor field, they still maintain a pragmatic strategy in drone procurement and continue to purchase DJI products.

At the same time, China has also established corresponding legal countermeasures, such as the Unreliable Entity List Regulations and the Anti-Foreign Sanctions Act, which authorize the Chinese government to take reciprocal measures, including trade and investment restrictions, against foreign entities that comply with foreign unilateral sanctions that harm Chinese enterprise interests.

This series of interactions suggests that a unified global technology market based on market principles is disintegrating. In its place, there is an era of rising "technological nationalism". Countries and regions such as the United States, the European Union, and Japan are prioritizing supply chain security and technological autonomy, resulting in the division of the global market into several loosely connected and competing regional technologies. Ecosystem. The Dajiang case is a landmark event under this macro trend, and its final direction will further reveal the depth and breadth of the division of the global technological order.

Write at the end

DJI¡¯s appeal against the U.S. Department of Defense is far from a single company¡¯s legal defense action. It focuses on the complex interaction between law, business and national security in the current geopolitical context. The trial and judgment of this case will have a profound impact on the future of China-U.S. technological relations and even global technological governance.

From a global perspective, the unilateral actions of the United States have not been widely followed by its allies. Instead, they have prompted major economies such as the European Union, Japan, and India to accelerate their respective strategies of technological independence or industrial independence. This indicates that the global technology market is moving from integration to fragmentation, and a multi-polar technology world composed of different technical standards, supply chain networks and geopolitical camps is taking shape.